Cryptocurrency has solidified its first truly impressive application—decentralized finance. The DeFi industry, as it is affectionately known, has locked in billions of dollars’ worth of cryptocurrency and is primarily at work doling out crypto loans.
Long ago, Satoshi Nakamoto predicted that blockchains would eliminate intermediaries from financial transactions, but few could have imagined the accuracy of that prediction. Today, the crypto loan industry is enabling peers to borrow and earn interest on crypto like never before, creating a new paradigm of financial independence that heralds significant changes in the way we use and earn money.
Crypto interest accounts are yet another example of creative ways to earn interest on your crypto and stablecoin assets. This is your guide for choosing the best platforms for earning interest on crypto today.
How to Earn Interest on Crypto: Choose a Platform
Earning interest is something typically associated with savings accounts and mutual funds. You can now add cryptocurrency to that list.
While most cryptocurrency users tend to think of the digital asset sphere as a place where currencies are routinely traded, several emerging DeFi platforms are challenging that perspective.
The process for earning interest on your cryptocurrency holdings is remarkably similar to that of earning interest via traditional avenues. If you know the drill when it comes to your bank—namely depositing cash into your savings account and holding it there while it accrues interest at a fixed rate—then you already understand this concept.
In general, the process for earning interest on crypto is the same. Choose a reputable crypto finance platform like BlockFi, YouHodler, CoinLoan, or Nexo, and make your first deposit.
For your initial deposit, platforms like BlockFi allow you to transfer cash, then exchange it for a supported stablecoin or another major cryptocurrency (BTC, ETH, LTC, and so on).
If you’re already holding one of the supported cryptocurrencies or stablecoins, then you can skip the cash-to-crypto exchange and deposit your digital assets in one go. All of the platforms mentioned above offer cryptocurrency interest accounts where your crypto is held while it accumulates interest as high as 12% APY (Annual Percentage Yield).
For reference, traditional savings accounts with interest payouts currently max out around 2.5% APY. On average, earning interest on crypto will net you returns several times higher—especially considering 8% APY is about the cryptocurrency interest standard.
Store Your Coins in a Crypto Interest Account
A crypto interest account is a place to store your existing cryptocurrency assets and collect interest on them. If you’ve ever used a savings account with a popular bank or local credit union, then you’ve dealt with this format for saving and accruing interest on your money.
A crypto interest account has three major aims:
- Act as a safe place to deposit and store your crypto
- Loan your crypto to borrowers
- Pay you interest on crypto you deposited
You might see #2 and think, “Wait a minute…loan my crypto?” We can’t blame you for the moment’s hesitation. However, this is how interest-generating savings accounts work.
Crypto DeFi platforms, whether it’s BlockFi, Celsius, Nexo, or another, are effectively paying you to borrow your money. That’s how interest-generating savings accounts work. As these platforms hand out loans to qualified borrowers, they collect fees on the lent funds and use those collected fees to pay back your stipulated APY.
When considering whether it’s worth opening a crypto interest account, also sometimes referred to as a crypto savings account, first look at the APY offered. The hot take on APY is it is basically what the platform is paying you for the privilege of holding—and loaning—your cash or crypto assets.
Generally, crypto loan platforms payout higher APY interest rates for smaller amounts of deposited cryptocurrencies, with APY rates shrinking with the more crypto you deposit. Why? Because cryptocurrencies are volatile assets, and it is more financially feasible for a crypto loan platform to pay higher APY rates to smaller accounts than to larger ones.
This isn’t true for stablecoin deposits, however. Since stablecoins are generally pegged or backed by a government cash asset like USD, their value should remain stable, predictable, and easier for crypto loan platforms to work with. Therefore, if you want to receive more interest on your crypto, then depositing stablecoin assets is the way to go.
5 Best Crypto Interest Accounts
If you’re stuck deciding whether a crypto interest account is right for you, first consider what you’re doing with your cryptocurrency right now. Is it working for you? Are you actively trading it or otherwise moving in and out of markets?
If the answer is no, then consider that a crypto interest account can at least put those holdings to work. Below are some recommended crypto interest accounts to get started with.
APY
Up to 16%
Interest Payout
Daily
Assets Accepted
BTC, ETH, NEXO, MATIC, 30+
- Zero fees
- $775M insurance on custodial assets
- Unique daily payout
- Fiat is not insured
APY
Up to 16%
Interest Payout
Daily
Assets Accepted
BTC, ETH, NEXO, MATIC, 30+
- Zero fees
- $775M insurance on custodial assets
- Unique daily payout
- Fiat is not insured
APY
Up to 9.96%
Interest Payout
Interest Payout: Weekly
Assets Accepted
USDT, LTC, USDC, BTC, 50+
- Free withdrawals
- $150M pooled crime insurance by Ledger Vault
- $100 Account minimum required
- Not yet available in the U.S.
APY
Up to 9.96%
Interest Payout
Interest Payout: Weekly
Assets Accepted
USDT, LTC, USDC, BTC, 50+
- Free withdrawals
- $150M pooled crime insurance by Ledger Vault
- $100 Account minimum required
- Not yet available in the U.S.
APY
Up to 14.5%
Interest Payout
Rewards paid weekly
Assets Accepted
BTC, ETH, USDC, 40+
- Online calculator allows you to calculate your rewards
- Flexible staking options
- 100% of user coins held offline in cold storage
- Rewards received is a simple daily reward rate and not compounded
- Not available in Hong Kong SAR, Switzerland, Russia, or Malta
- Website is only informational, all transactions are through the app
APY
Up to 14.5%
Interest Payout
Rewards paid weekly
Assets Accepted
BTC, ETH, USDC, 40+
- Online calculator allows you to calculate your rewards
- Flexible staking options
- 100% of user coins held offline in cold storage
- Rewards received is a simple daily reward rate and not compounded
- Not available in Hong Kong SAR, Switzerland, Russia, or Malta
- Website is only informational, all transactions are through the app
APY
Up to 8%
Interest Payout
Accrues daily, paid & compounded monthly
Assets Accepted
BTC, USDC
- No minimum balance
- No locked-in terms & withdraw anytime
- Anonymously verify assets in periodic reports
- May not be available in all areas
- Only two assets accepted
- USDC account has 15 USDC withdrawal fee
APY
Up to 8%
Interest Payout
Accrues daily, paid & compounded monthly
Assets Accepted
BTC, USDC
- No minimum balance
- No locked-in terms & withdraw anytime
- Anonymously verify assets in periodic reports
- May not be available in all areas
- Only two assets accepted
- USDC account has 15 USDC withdrawal fee
APY
Up to 9.96%
Interest Payout
Interest Payout: Weekly
Assets Accepted
USDT, LTC, USDC, BTC, 50+
- Free withdrawals
- $150M pooled crime insurance by Ledger Vault
- $100 Account minimum required
- Not yet available in the U.S.
APY
Up to 9.96%
Interest Payout
Interest Payout: Weekly
Assets Accepted
USDT, LTC, USDC, BTC, 50+
- Free withdrawals
- $150M pooled crime insurance by Ledger Vault
- $100 Account minimum required
- Not yet available in the U.S.
Nexo’s high-yield crypto savings account offers compound interest paid out daily—a nice step up when compared to the weekly option offered by many competitors. At a maximum of 8% APY on cryptocurrencies and stablecoins, Nexo doesn’t offer the highest return out there, but the tradeoff is that you get Nexo’s sterling reputation and impeccable insurance guarantees.
Another standout feature of the Nexo crypto interest account is the seemingly endless amount of cryptocurrency deposit options. The sheer diversity of digital assets you can hold and be paid for makes it easy to satisfy the holdings of many cryptocurrency investors. You can also withdraw your earnings at any time giving the platform top marks for flexibility.
Not to be outdone by crypto interest accounts offered by big-name competitors, YouHodler offers some of the highest APY rates available today, depending on the amount and type of cryptocurrency you deposit. Additionally, you can cancel the account at any time, so there’s no need to feel locked in.
As with other crypto interest accounts, YouHodler’s savings account rates are highest when you deposit stablecoins and fiat currencies such as USD, GBP, EUR, USDT, PAX, and TUSD. However, the interest paid on crypto assets like BTC, ETH, LTC, and XRP are still very competitive. YouHodler also scores bonus points for having options to deposit alternative assets like XLM, LINK, and BNB.
Use a Crypto Interest Calculator to See How Much You Can Earn
Ready to calculate how much interest you can earn with crypto? Check out these crypto interest calculators from a few of the platforms previously mentioned:
If your cryptocurrency, stablecoins, and fiat assets are currently at rest, then maybe it’s time to consider parking them in a high-yield crypto interest account to generate additional income.
